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Lecture

ENSC 1005 Lecture Notes - Genuine Progress Indicator, Ecological Footprint, Subsistence Economy


Department
Child and Family Studies
Course Code
ENSC 1005
Professor
Heather Kaye

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Monday March 18, 2013
Economics, Politics and Ethics (CHAPTER 26)
Economy system of producing, distributing and consuming economic goods
Economic goods any material items or services that satisfies people’s wants or
needs
Economic resources kinds of capital used in an economy to produce economic
goods
Three types of resources (capital):
1. Natural resources Earth’s capital
2. Human resources People’s talents
3. Manufactured resources items made from natural resources with the help
from human resources
Demand the amount of goods or service people want
Supply the amount of goods or service that is available
Economic growth an increase in a nation’s capacity to provide people with goods
and services
Economic development improvement of human living standards by economic
growth
Types of Economies
1) Subsistence economy people meet most or all of their daily needs directly
from nature and do not purchase or trade for most of life’s necessities
- Oldest type of economy (comprises much of human population)
2) Pure market economy (capitalist market economy) buyers and sellers
freely interact in markets to determine which goods and services to produce,
how much to produce, and how to produce and distribute these goods and
services
- Economic resources owned by private individuals and institutions
- See FIG 26.2
- THEORETICAL IDEAL
3) Pure command economy (centrally planned/socialist economy) central
government determines in a top-down manner how to allocate resources
- Economic resource owned by government
4) Hybrid (real world) economy mixed economy where government
intervenes in a market economy to: prevent monopolies or cartels, spread
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wealth, protect those who cannot attain basic needs, promote stability by
controlling boom-and-bust cycles
- See p.621-626 for other reasons
Types of Economists
Neoclassical economic growth is necessary, desirable, and unlimited
- Earth’s capital is part of a human economic system
- Four fundamental assumptions:
1) Resources are infinite or substitutable
2) Long-term effects should be discounted
3) Costs and benefits are internal
4) Growth is good
Ecological and Environmental economic systems are part of the
Environment that depend on the Earth’s capital which is irreplaceable
- See FIG 26.4
- Distinguish between unsustainable economic growth and
environmentally sustainable economic development
- See FIG 26.5
Environmentally sustainable economic development encourages forms of
economic growth that meet the basic needs of current generations of all species
without preventing future generations of all species without preventing future
generations of all species from meeting their basic needs, and discourages
environment;;y harmful forms of economic growth
Strategies to help make the shift to environmentally sustainable economic
development:
- Use resources more efficiently
- Use indicators to monitor economic and environmental health
- Use full-cost pricing life-cycle costs
- Eliminate environmentally harmful government subsidies and tax breaks
- Shift taxes by increasing taxes on pollution and resource waste
- Pass and enforce laws and regulations to prevent pollution and resource depletion
- Use tradable permits to pollute or use resources within programmes that limit
overall pollution and resource use
- Use eco-labeling to allow consumers to make informed choices
Economic Growth
Technology consumes natural resources so use a better technology and more
efficient productions systems to produce goods and services with fewer resources
Efficiency of resource use produce the same or more goods and services with
smaller input of 3 resources
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